WATCHDOG: Port wants $27M of $92M parking deal

The request, not discussed publicly until now, could pay for two key projects in city's long-range plans

Jul. 19, 2013

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Development director kept as consultant

Other developments in the battle over the city’s plan to lease its parking system: • The city has contracted with its former economic development director, who left last week for a job in Detroit, to stay on as a consultant until the deal’s finished. Odis Jones’ consulting contract, in effect through Dec. 31 and obtained by The Enquirer on Thursday, allows him to be paid $700 for each day he works for Cincinnati. It sets the maximum he can be paid at $15,000. Meg Olberding, spokeswoman for City Manager Milton Dohoney, said the city still needs Jones’ expertise on big economic development issues, including parking and negotiating on a Downtown convention hotel. • COAST wants Cincinnati’s top lawyer to stop the city from leasing its parking meters, lots and garages. Chris Finney, lawyer for the Citizens Opposed to Additional Spending and Taxes, says the version of the deal signed by Dohoney included changes that council didn’t approve. He sent a “taxpayer letter” to City Solicitor John Curp, asking Curp to take the issue to court. It doesn’t outright say that COAST will sue if the city doesn’t stop, but that’s what such letters are for – sort of a warning shot. • Walker Parking, the Indianapolis company that authored a memo critical of Cincinnati’s parking deal, has been under a five-year contract with the city since 2009 for overall parking services. But when the company took on additional work for the parking lease proposal, it asked for more money. The city paid the company $315,339.64 this year, specifically for its work studying the proposal, according to the contract amendment. That’s some of the work laid out in a much-talked-about June 20 memo that the city now says was too out of date to be relevant.

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The Port of Greater Cincinnati Development Authority wants almost one-third of the $92 million upfront payment the city is to receive for leasing its parking system to the economic development authority to operate with private partners.

Port authority President and CEO Laura Brunner has asked Vice Mayor Roxanne Qualls that the city send $27 million of the $92 million back to the port to use for economic development projects across Cincinnati, according to a document obtained by The Enquirer.

The idea of the port taking a share of the money was not made public or discussed by City Council before the lease was approved.

The lease calls for the port authority to receive a one-time, upfront payment of $319,125 and about $300,000 each year of the deal. Those modest amounts concerned some port authority board members, who are pushing for more significant funding sources for multimillion-dollar real-estate and development projects.

Qualls, head of City Council’s budget and finance committee, told The Enquirer on Thursday she favors the idea. Brunner’s request has not yet been discussed with members of council, some of whom are not happy about it.

“That sounds pretty crazy at this point,” said Councilwoman Laure Quinlivan, who originally voted in favor of the lease but now opposes it. “The whole idea was they’re not driven by a profit motive. This isn’t supposed to funnel money back to the port authority, and if that’s what this is for, then it’s another disappointment of the deal.”

Councilman P.G. Sittenfeld, who voted against the lease, told The Enquirer Thursday: “I don’t inherently see any problem with that” because the port authority is “making investments that are going to have broad impact for decades to come.”

He reiterated he thinks the lease deal is a bad one for the city, but favors the port’s economic-development mission.

Qualls said Brunner’s request is fair. “Quite frankly, what the port has identified is consistent with the city’s adopted economic-development policy, and we need to support them to the greatest extent we can,” Qualls said.

Both the city and port authority on June 21 signed the controversial deal, which promises $92 million up front and $3 million a year for the city. The port authority board is reviewing the lease agreement during a 75-day window that ends Sept. 4.

City Council has not approved allocation of the $92 million, although City Manager Milton Dohoney earlier identified economic development and community projects for which he said the money would be used.

Dohoney’s original plan was to use the $92 million payment this way:

• $25.8 million for part of the projected 2014 city operating deficit.

• $20.9 million for the projected 2015 deficit.

• $20 million for the city’s share of an interchange at Interstate 71 and Martin Luther King Jr. Drive considered critical to the city’s employment picture.

• $12 million to convert Tower Place into parking and to jump start conversion of Downtown’s Pogue’s garage into a 30-story apartment building with a grocery store.

• $6.3 million for city reserves.

• $4 million to help build a carousel and fountain at Smale Riverfront Park.

• $3 million for an East Side recreation trail.

But other city and private money has been identified for some of those projects, and the city adopted a budget covering the 2014 deficit. That could open the way for the port authority to get a cut of parking money.

In an email dated June 14, Brunner told port authority board Vice Chairwoman Lynn Marmer and board member Tom Williams that Brunner twice had discussed with Qualls that the money be allocated to the port authority for a redevelopment project in Bond Hill, development of an industrial park in Queensgate and other work in unspecified neighborhoods through the port-managed land bank.

Brunner declined Thursday to discuss specifics about her decision to request the money, but said: “The city administration and council have been supportive of what we’re doing” with neighborhood economic-development projects. She added she is confident the administration will present options to City Council that include giving the port authority upfront parking money.

Brunner wrote in the email: “This was received positively (by Qualls), and she suggested that after the lease was signed she would make a motion to give council a chance to vote on the reallocation. At that time, we would have the opportunity to meet with council members to make that pitch.”

In a response email dated June 14, however, Marmer was skeptical about Qualls’ commitment.

“As for the parking deal, Roxanne will promise anything,” Marmer, a Kroger vice president, wrote to Brunner.

“ ... Her words according to you about being able to compete for funding gives me no comfort. None. We could sign the lease and get nothing but expense money. We also will incur a lot of political heat from a (potential) future Mayor (John) Cranley. And others.”

Qualls, who is running against Cranley for mayor, told The Enquirer in responding to Marmer’s email: “I’m not sure what all that means.”

Cranley, one of the parking deal’s most outspoken critics, reiterated his concerns about how higher meter fees and potential aggressive enforcement by private operators will hurt Downtown and small neighborhood businesses.

“My issue is with the city, which has misled the public throughout on this deal,” Cranley said. “The deal is hopelessly corrupted by the city saying they needed this for a budget when they really didn’t.”

The port authority has been trying to identify money for major real estate development projects since the city and Hamilton County decided to commit more resources in 2011 and empower the port authority to be a leading driver of economic development in the region. The city and county each give the port authority $700,000 annually.

Port authority officials, however, say they need millions of dollars to make a significant economic-development impact across the city. Port board member Williams – president and CEO of North American Properties and part-owner of the Reds – asked Sittenfeld to step up and help better fund the port authority in an email dated June 26.

The Enquirer obtained emails through an open records request.

“PG – the Port isn’t getting much out of this. But it should,” Williams wrote. “You can turn this around and create a bold vision by using this to properly fund the Port with a stream of income and demand that all capital dollars coming in from this monetization strategy can only be spent on capital projects (not operating losses).”

The Bond Hill and Queensgate projects Brunner mentioned have been part of the city’s long-range Go Cincinnati economic development plan and also included in the port authority’s long-term growth plan.

Brunner said in an email that she asked Qualls for $12 million to be used for the redevelopment of the Jordan Crossing shopping center site in Bond Hill, $10 million for a new industrial park in Queensgate and $5 million for the land bank.

The port authority has identified 14 city and county neighborhoods to benefit from land bank money, which is being used to demolish blighted properties and prepare sites for redevelopment. ⬛